McCarty v. Pheasant Run, Inc.

• Decision Date: 22 July 1987
• Docket Number: No. 86-2135,86-2135
• Citation: 826 F.2d 1554
• Parties: 23 Fed. R. Evid. Serv. 251 Dula McCARTY, Plaintiff-Appellant, v. PHEASANT RUN, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1554

826 F.2d 1554

23 Fed. R. Evid. Serv. 251

Dula McCARTY, Plaintiff-Appellant, v. PHEASANT RUN, INC., Defendant-Appellee.

No. 86-2135.

United States Court of Appeals Seventh Circuit.

Argued Feb. 9, 1987.

Decided July 22, 1987.

Arthur L. Klein, Arnstein, Gluck, Lehr, Barron & Milligan, Chicago, Ill., for plaintiff-appellant.

Byron D. Knight, Judge & Knight, Ltd., Park Ridge, Ill., for defendant-appellee.

Before BAUER, Chief Judge, and CUDAHY and POSNER, Circuit Judges.

POSNER, Circuit Judge.

The high crime rate in the United States has interacted with expanding notions of tort liability to make suits charging hotel owners with negligence in failing to protect their guests from criminal attacks increasingly common. See Annot., 28 A.L.R.4th 80 (1984). Dula McCarty, a guest at the Pheasant Run Lodge in St. Charles, Illinois, was assaulted by an intruder in her room, and brought suit against the owner of the resort. The suit charges negligence, and bases federal jurisdiction on diversity of citizenship. The parties agree that Illinois law governs the substantive issues. The jury brought in a verdict for the defendant, and Mrs. McCarty appeals on a variety of grounds.

In 1981 Mrs. McCarty, then 58 years old and a merchandise manager for Sears Roebuck, checked into Pheasant Run--a large resort hotel on 160 acres outside Chicago--to attend a Sears business meeting. In one wall of her second-floor room was a sliding glass door equipped with a lock and a safety chain. The door opens onto a walkway that has stairs leading to a lighted courtyard to which there is public access. The drapes were drawn and the door covered by them. Mrs. McCarty left the room for dinner and a meeting. When she returned, she undressed and got ready for bed. As she was coming out of the bathroom, she was attacked by a man with a stocking mask. He beat and threatened to rape her. She fought him off, and he fled. He has never been caught. Although Mrs. McCarty's physical injuries were not serious, she claims that the incident caused prolonged emotional distress which, among other things, led her to take early retirement from Sears.

Investigation of the incident by the police revealed that the sliding glass door had been closed but not locked, that it had been pried open from the outside, and that the security chain had been broken. The intruder must have entered Mrs. McCarty's room by opening the door to the extent permitted by the chain, breaking the chain, and sliding the door open the rest of the way. Then he concealed himself somewhere in the room until she returned and entered the bathroom.

Mrs. McCarty argues that the judge should have granted her motion for judgment notwithstanding the jury's verdict for the defendant. But she failed to move for a directed verdict on the issue of the defendant's negligence, and that is a prerequisite to judgment n.o.v. Fed.R.Civ.P. 50(b). It is true that she made a motion for a directed verdict on the issue of her contributory negligence, which was denied, and that the defendant made a motion for a directed verdict on the issue of its negligence, which was also denied, but these motions were not equivalent to the motion she failed to make. Even if she had been innocent of contributory negligence as a matter of law, this would not have made the defendant guilty of negligence as a matter of law; in many accidents, neither injurer nor victim is at fault, and then there is no liability. Similarly, all that the denial of the defendant's motion for a directed verdict showed was that the defendant was not innocent of negligence as a matter of law; it could of course be guilty of negligence as a matter of law. Thus, neither motion for directed verdict presented the question whether the issue of the defendant's negligence should be withdrawn from the jury and resolved in the plaintiff's favor. She could not present that issue for the first time in her motion for judgment n.o.v.

The modern rationale for the rule that a motion for directed verdict is a prerequisite to judgment n.o.v. is that the opposing party should have a chance to rectify (or at least seek the court's leave to rectify) deficiencies in his evidence before it is too late, that is, before the case goes to the jury. McKinnon v. City of Berwyn, 750 F.2d 1383, 1388 (7th Cir.1984); see also Benson v. Allphin, 786 F.2d 268, 273-74 (7th Cir.1986). That rationale is applicable to this case. After both motions for directed verdict (the plaintiff's on contributory negligence, and the defendant's on negligence) were denied, the defendant had no reason to think it hadn't put in enough evidence to get to the jury on the issue of liability. If the plaintiff thought otherwise she had to move for a directed verdict on that issue.

As an alternative ground for denying the motion for judgment n.o.v., the district judge correctly pointed out that the case was not so one-sided in the plaintiff's favor that the grant of a directed verdict or judgment n.o.v. in her favor would be proper. Her theories of negligence are that the defendant should have made sure the door was locked when she was first shown to her room; should have warned her to keep the sliding glass door locked; should have equipped the door with a better lock; should have had more security guards (only two were on duty, and the hotel has more than 500 rooms), cf. Nordmann v. National Hotel Co., 425 F.2d 1103, 1107 (5th Cir.1970); should have made the walkway on which the door opened inaccessible from ground level; should have adopted better procedures for preventing unauthorized persons from getting hold of keys to guests' rooms; or should have done some combination of these things. The suggestion that the defendant should have had better procedures for keeping keys away from unauthorized persons is irrelevant, for it is extremely unlikely that the intruder entered the room through the front door. Compare Danile v. Oak Park Arms Hotel, Inc., 55 Ill.App.2d 2, 203 N.E.2d 706 (1964). The other theories were for the jury to accept or reject, and its rejection of them was not unreasonable. Cf. Courtney v. Remler, 566 F.Supp. 1225, 1233-34 (D.S.C.1983).

There are various ways in which courts formulate the negligence standard. The analytically (not necessarily the operationally) most precise is that it involves determining whether the burden of precaution is less than the magnitude of the accident, if it occurs, multiplied by the probability of occurrence. (The product of this multiplication, or "discounting," is what economists call an expected accident cost.) If the burden is less, the precaution should be taken. This is the famous "Hand Formula" announced in United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir.1947) (L. Hand, J.), an admiralty case, and since applied in a variety of cases not limited to admiralty. See, e.g., United States Fidelity & Guaranty Co. v. Jadranska Slobodna Plovidba, 683 F.2d 1022, 1026 (7th Cir.1982); Maryland Cas. Co. v. City of Jackson, 493 So.2d 955, 960 n. 3 (Miss.1986) (dictum); People Express Airlines, Inc. v. Consolidated Rail Corp., 100 N.J. 246, 266-67, 495 A.2d 107, 117-18 (1985); Micallef v. Miehle Co., 39 N.Y.2d 376, 386, 384 N.Y.S.2d 115, 348 N.E.2d 571, 577-78 (1976); Phillips v. Croy, 173 Ind.App. 401, 404-05, 363 N.E.2d 1283, 1285 (1977); Benlehr v. Shell Oil Co., 62 Ohio App.2d 1, 9 and n. 5, 402 N.E.2d 1203, 1208 and n. 5 (1978); Golden v. McCurry, 392 So.2d 815, 819 (Ala.1980) (separate opinion); 3 Harper, James & Gray, The Law of Torts Sec. 16.9, at pp. 467- 68 (2d ed. 1986); Prosser and Keeton on the Law of Torts Sec. 31, at p. 173 (5th ed. 1984); cf. East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 2302, 90 L.Ed.2d 865 (1986); Prentis v. Yale Mfg. Co., 421 Mich. 670, 687, 365 N.W.2d 176, 184 (1984).

We are not authorized to change the common law of Illinois, however, and Illinois courts do not cite the Hand Formula but instead define negligence as failure to use reasonable care, a term left undefined. See, e.g., Hardware State Bank v. Cotner, 55 Ill.2d 240, 247-48, 302 N.E.2d 257, 262 (1973); Denniston v. Skelly Oil Co., 47 Ill.App.3d 1054, 1067, 6 Ill.Dec. 77, 87, 362 N.E.2d 712, 722 (1977). But as this is a distinction without a substantive difference, we have not hesitated to use the Hand Formula in cases governed by Illinois law. See EVRA Corp. v. Swiss Bank Corp., 673 F.2d 951, 958 (7th Cir.1982); Davis v. Consolidated Rail Corp., 788 F.2d 1260, 1263-64 (7th Cir.1986). The formula translates into economic terms the conventional legal test for negligence. This can be seen by considering the factors that the Illinois courts take into account in negligence cases: the same factors, and in the same relation, as in the Hand Formula. See Hendricks v. Peabody Coal Co., 115 Ill.App.2d 35, 45-46, 253 N.E.2d 56, 61 (1969); Bezark v. Kostner Manor, Inc., 29 Ill.App.2d 106, 111-12, 172 N.E.2d 424, 426-27 (1961). Unreasonable conduct is merely the failure to take precautions that would generate greater benefits in avoiding accidents than the precautions would cost.

Ordinarily, and here, the parties do not give the jury the information required to quantify the variables that the Hand Formula picks out as relevant. That is why the formula has greater analytic than operational significance. Conceptual as well as practical difficulties in monetizing personal injuries may continue to frustrate efforts to measure expected accident costs with the precision that is possible, in principle at least, in measuring the other side of the equation--the cost or burden of precaution. Cf. Conway v. O'Brien, 111 F.2d 611, 612 (2d Cir.1940) (L. Hand, J.), rev'd on other grounds, 312 U.S. 492, 61 S.Ct. 634, 85 L.Ed. 969 (1941). For many years to come juries may be forced to make rough judgments of reasonableness, intuiting rather than measuring the factors in the Hand Formula; and so long as their judgment is...